Recommendations & Conclusions
11 items
2
Conclusion
Thirty-Seventh Report - Decarbonising h…
Accepted
We are concerned that there is too much complexity and potential confusion for households to enable them to make informed decisions about installing a heat pump. Households can face complex decisions when looking to install a heat pump. For example, DESNZ is removing a requirement to have minimum standards for …
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We are concerned that there is too much complexity and potential confusion for households to enable them to make informed decisions about installing a heat pump. Households can face complex decisions when looking to install a heat pump. For example, DESNZ is removing a requirement to have minimum standards for properties to have loft and cavity wall insulation in order to be eligible to apply for a grant through the Boiler Upgrade Scheme. It is instead leaving this as a choice for householders, but has not made available any additional evidence about how this choice will impact on energy bills. DESNZ accepts that it needs to undertake a fair bit of myth busting about the quality of the consumer experience when living with a heat pump. Households also need to identify a skilled installer and to do this they need proper information to decide where to spend their money. But many are unsure where to get impartial advice on making improvements to reduce their homes’ emissions. Recommendation 2: DESNZ should, as part of its Treasury Minute response, set out how it will make the heat pump landscape easier for consumers to navigate, for example being clear on the impact of insulation on energy bills, by directly comparing heat pump running costs in homes with and without insulation, with this information provided through an easy-to-use website. 6 Decarbonising home heating
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Government response AI summary
The government agrees and is improving its Heat Pump Home Suitability tool to include localized links, advice on pipework and radiators, and the impact of insulation on energy bills. It will also set out further improvements to consumer navigation in the Warm Homes Plan.
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HM Treasury
3
Conclusion
Thirty-Seventh Report - Decarbonising h…
Accepted
DESNZ has made good progress in increasing the number of trained heat pump installers, but it faces a huge challenge to make sure there are enough installers to achieve its target to install 600,000 heat pumps per year by 2028. DESNZ reports that it is on track towards meeting its …
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DESNZ has made good progress in increasing the number of trained heat pump installers, but it faces a huge challenge to make sure there are enough installers to achieve its target to install 600,000 heat pumps per year by 2028. DESNZ reports that it is on track towards meeting its target to have 12,000 trained heat pump installers by 2025, with 7,000 installers trained so far. The Heat Pump Association estimates, however, that there will need to be 33,700 trained heat pump installers by 2028 in order to meet DESNZ’s overall installations target. DESNZ recognises that there is more to be done to achieve this and that it needs to keep investing in training heat pump installers after 2025, but decisions for future training grants will be for the next spending review. A key challenge will be to retrain around 110,000 existing gas heating engineers to be able to install heat pumps. Although DESNZ considers this could be done quickly, this is nonetheless a large number of people who will need to be retrained given the number of installers it has trained so far. Recommendation 3: DESNZ should, as part of its Treasury Minute response, set out what actions it will take to increase the number of heat pump installers after
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Government response AI summary
The government agrees and is taking actions to increase installers, including the Heat Training Grant (until April 2025), a new Low Carbon Heating Technician apprenticeship (Autumn 2023), and supporting local supply chains with over £600,000 in pilots. It has also established the Office for Clean …
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HM Treasury
5
Conclusion
Thirty-Seventh Report - Decarbonising h…
Accepted
DESNZ has not yet worked out how it will support households to decarbonise their homes where heat pumps are not a practical solution. An estimated 20 per cent of homes might be exempt from the government’s plans to phase out new fossil fuel boilers in 2035. This includes those requiring …
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DESNZ has not yet worked out how it will support households to decarbonise their homes where heat pumps are not a practical solution. An estimated 20 per cent of homes might be exempt from the government’s plans to phase out new fossil fuel boilers in 2035. This includes those requiring energy efficiency upgrades or that lack space to install a heat pump, such as densely populated urban areas and blocks of flats. DESNZ intends to consult this year on how it can help people decarbonise their homes for those where a heat pump might not be the most appropriate solution. It considers heat networks to be the next major alternative technology for people living in these areas and intends to invest some £868 million in heat networks up to
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Government response AI summary
The government agrees to provide further information on alternative low-carbon heating technologies for properties unsuitable for traditional heat pumps and has commissioned research on feasible approaches, which it intends to publish in Summer 2025.
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HM Treasury
7
Conclusion
Thirty-Seventh Report - Decarbonising h…
Accepted
Low-carbon heating will increase demand for electricity, but the government’s plans to decarbonise power have been delayed substantially. Heat pumps may change existing patterns around the demand for electricity, and DESNZ recognises that it needs to make sure the power system can manage peaks and troughs throughout the day. Low-carbon …
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Low-carbon heating will increase demand for electricity, but the government’s plans to decarbonise power have been delayed substantially. Heat pumps may change existing patterns around the demand for electricity, and DESNZ recognises that it needs to make sure the power system can manage peaks and troughs throughout the day. Low-carbon flexible sources of generation will be important to help manage a grid that is reliant on renewable energy, particularly offshore wind and solar electricity generation that is determined by the weather. The main technologies for this will be carbon capture, hydrogen power and long-duration energy storage, particularly needed during the winter months. DESNZ has, however delayed its delivery target to pull together the different plans for decarbonising power from December 2023 to mid-2024. We previously warned that the lack of an overarching delivery plan makes it difficult for DESNZ to understand the decisions and timings it must take to achieve its ambition to decarbonise the power sector by
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Government response AI summary
The government agrees and has announced a Clean Power by 2030 target, appointing Chris Stark to lead a '2030 Mission Control' to accelerate delivery of critical clean energy infrastructure and resolve obstacles.
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HM Treasury
1
Conclusion
Thirty-Seventh Report - Decarbonising h…
Accepted
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Energy Security and Net Zero (DESNZ) about decarbonising home heating.1
Government response AI summary
The government agrees, stating it is investing up to £42 million in the Heat Pump Ready innovation programme, part of the £1 billion Net Zero Innovation Portfolio, with projects underway and concluding in 2025, to overcome barriers and support innovation in heat pump deployment.
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HM Treasury
8
Recommendation
Thirty-Seventh Report - Decarbonising h…
Accepted
Grants under the Boiler Upgrade Scheme are available to all households irrespective of income. While other schemes are available for low income households, such as the Social Housing Decarbonisation Fund, Home Upgrade Grant and the Energy Company Obligation, DESNZ explained that the Boiler Upgrade Scheme is designed for the able- …
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Grants under the Boiler Upgrade Scheme are available to all households irrespective of income. While other schemes are available for low income households, such as the Social Housing Decarbonisation Fund, Home Upgrade Grant and the Energy Company Obligation, DESNZ explained that the Boiler Upgrade Scheme is designed for the able- to-pay market. The £7,500 grant covers nearly 60% of the average cost of installing a heat pump, based on the average cost in 2023.11 An energy industry representative, the Energy & Utilities Alliance, told us in its written evidence to us that by definition, only those households who can afford to pay the remaining amount to top up the grant can afford to participate in the Scheme.12 According to the Energy Saving Trust, this creates a gap in support for those who are ineligible for fuel poverty schemes but are unable to afford the total upfront cost of switching to a low carbon heating system.13 Similarly, the MCS 5 Qq 3, 49; C&AG’s Report, paras 15–16. Installation cost figures represent real-term reduction compared to the cost in 2021 6 Qq 3, 30, 119; C&AG’s Report para 16 7 DHH0015, Written evidence submitted by The Building Societies Association, 29 April 2024; DHH0043, Written evidence submitted by Calor Gas, 29 April 2024; DHH0046, Written evidence submitted by Good Energy, 29 April 2024; DHH0053, Written evidence submitted by Centrica, 29 April 2024 8 Qq 3, 10, 30; C&AG’s Report, para 15 9 Qq 11, 43 10 Qq 11, 43; C&AG’s Report, para 3.19 11 Qq 30, 54–55; C&AG’s Report, para 15 12 DHH0040, Written evidence submitted by Energy & Utilities Alliance, 29 April 2024 13 DHH0026, Written evidence submitted by Energy Saving Trust, 29 April 2024 Decarbonising home heating 11 Foundation told us that upfront costs were too high for many households even with the help of a grant, making it “impossible for households without savings to benefit from the scheme”.14 Energy UK, a representative body for the energy industry, called for the costs to be
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Government response AI summary
Government agrees with the recommendation and commits to writing to the Committee by Spring 2025 upon publication of interim findings from the Boiler Upgrade Scheme evaluation, detailing heat pump uptake among different socio-economic groups.
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HM Treasury
9
Recommendation
Thirty-Seventh Report - Decarbonising h…
Accepted
We asked DESNZ whether heat pumps were being installed by people who may have switched to a heat pump anyway, particularly more affluent households. DESNZ accepted that the universal nature of the Boiler Upgrade Scheme raised a prospect of “deadweight”, with some recipients able to afford to install a heat …
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We asked DESNZ whether heat pumps were being installed by people who may have switched to a heat pump anyway, particularly more affluent households. DESNZ accepted that the universal nature of the Boiler Upgrade Scheme raised a prospect of “deadweight”, with some recipients able to afford to install a heat pump even without the grant, but explained that it decided to have a flat-rate scheme for “simplicity” rather than linking grants to income. It told us that it believed that its approach was supported by the increase in applications since the grant uplift. DESNZ is evaluating uptake of the Boiler Upgrade Scheme grant among different socio-economic groups, for which interim results are due in the second half of 2024.16
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Government response AI summary
Government agrees with the recommendation and commits to writing to the Committee by Spring 2025 upon publication of interim findings from the Boiler Upgrade Scheme evaluation, detailing heat pump uptake among different socio-economic groups.
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HM Treasury
23
Conclusion
Thirty-Seventh Report - Decarbonising h…
Accepted
We asked DESNZ how it was learning lessons from the roll out of heat pumps. It explained that it had already learned some lessons, such as about the level of grant driving demand, and that it would continue to evaluate the roll out of the Boiler Upgrade Scheme “very carefully” …
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We asked DESNZ how it was learning lessons from the roll out of heat pumps. It explained that it had already learned some lessons, such as about the level of grant driving demand, and that it would continue to evaluate the roll out of the Boiler Upgrade Scheme “very carefully” to see if there were further refinements to increase uptake further. It added that a first interim evaluation report for the Boiler Upgrade Scheme was due later in 2024, but it did not outline what the evaluation would cover.41 38 Qq 48, 49, 60; C&AG’s Report, para 3.3. The Microgeneration Certification Scheme (MCS) is a quality assurance scheme. The Boiler Upgrade Scheme requires heat pumps to be installed by MCS-certified installers. 39 Qq 48, 60 40 Q 48; C&AG’s Report, paras 17, 19, 3.3 41 Qq 10, 39 16 Decarbonising home heating 3 The pathway to decarbonising home heating Supporting all households
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Government response AI summary
The government agrees with the recommendation and commits to writing to the Committee upon publication of the first interim findings from the Boiler Upgrade Scheme evaluation. This report is expected in Spring 2025 and will include details on heat pump take-up across different socio-economic groups.
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HM Treasury
28
Recommendation
Thirty-Seventh Report - Decarbonising h…
Accepted
In the 2021 Heat and Buildings strategy, DESNZ committed to developing the evidence base necessary to take strategic decisions on the role of hydrogen for heating buildings in 2026. It also committed to establishing large-scale trials of hydrogen for heating, including: a neighbourhood trial by 2023, a village scale trial …
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In the 2021 Heat and Buildings strategy, DESNZ committed to developing the evidence base necessary to take strategic decisions on the role of hydrogen for heating buildings in 2026. It also committed to establishing large-scale trials of hydrogen for heating, including: a neighbourhood trial by 2023, a village scale trial by 2025; and developing plans by 2025 for a possible hydrogen town that can be converted by the end of the decade.51 Major trials intended to support decisions on hydrogen for heating have, however, been cancelled or delayed. We noted that two hydrogen village trials had been abandoned. DESNZ announced in July 2023 that it was no longer proceeding with supporting a village trial in Whitby, originally planned for 2025, owing to residents’ reluctance to change their heating systems. In December 2023, DESNZ announced that it would also not proceed with the other proposed village trial site in Redcar, because the necessary local hydrogen supply would not be available. A gas distribution company plans to start a neighbourhood trial, originally planned for 2023, in 2024 with around 300 interested participants in domestic properties in Fife.52
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Government response AI summary
Government confirms the recommendation is implemented, acknowledging the cancellation or delay of major hydrogen trials and outlining its ongoing research and development programme to gather evidence for strategic decisions on hydrogen for heating.
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HM Treasury
29
Recommendation
Thirty-Seventh Report - Decarbonising h…
Accepted
We observed that, at the time of our evidence session, an announcement on a successful bidder for a hydrogen town, planned for the end of this decade, was delayed by 13 months. We asked DESNZ when an announcement could now be expected. DESNZ told us that it was considering its …
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We observed that, at the time of our evidence session, an announcement on a successful bidder for a hydrogen town, planned for the end of this decade, was delayed by 13 months. We asked DESNZ when an announcement could now be expected. DESNZ told us that it was considering its next steps on the hydrogen town trial and would set 48 Qq 67–68, 70, 80–82; C&AG’s Report, para 2.22; Department for Energy Security & Net Zero, UK heat networks: market overview, September 2023 49 DHH0003, Written evidence submitted by The Chartered Institute of Housing, 29 April 2024 50 Qq 67, 71–72, 80; C&AG’s Report, para 2.22 51 HM Government, Heat and buildings strategy, October 2021, white paper, CP 388, pages 23–24. 52 Qq 85, 86, 88; C&AG’s Report, para 2.3 18 Decarbonising home heating out its plans shortly, but could not give a more precise date than before the summer.53 Following our evidence session, on 9 May 2024 DESNZ announced that it had decided not to progress work on a hydrogen town pilot until after the 2026 strategic decisions on the role of hydrogen in decarbonising heat.54
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Government response AI summary
Government confirms the recommendation is implemented, stating the decision not to progress a hydrogen town pilot until after 2026 strategic decisions, and outlining its ongoing research and development programme for hydrogen heating.
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HM Treasury
30
Conclusion
Thirty-Seventh Report - Decarbonising h…
Accepted
In response to a question about how DESNZ had got so far with the trial at Redcar before realising that the supply of hydrogen needed was not available, DESNZ said that it was not solely reliant on the outcomes from the cancelled village trials, although the trials were “important”. It …
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In response to a question about how DESNZ had got so far with the trial at Redcar before realising that the supply of hydrogen needed was not available, DESNZ said that it was not solely reliant on the outcomes from the cancelled village trials, although the trials were “important”. It considered that “there were other sources and ways of getting the evidence that we needed in order to make decisions around the role of hydrogen”.55 We asked DESNZ what evidence it would use to make a decision and whether it still expected to be in a position to make a decision by 2026 given the delays and cancellations of hydrogen trials. DESNZ told us that it was still working towards being able to make a strategic decision in 2026. It explained that it was drawing on other sources of evidence, such as a trial to use hydrogen for home heating across a neighbourhood in Fife, alongside trials in other countries, such as the Netherlands and Germany. In addition, it explained that it was working with the Health and Safety Executive to develop an evidence base around the safety and appropriateness of hydrogen to inform its 2026 decision.56 Written evidence from Hydrogen UK, however, highlighted that the cancellation of the village trials had “adversely” affected the collection of data needed to evaluate hydrogen for heating.57 We noted that the neighbourhood trial was exclusively testing supply to the domestic market, but by 2026 there would not have been a live trial of hydrogen supply to non-domestic properties.58
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Government response AI summary
The government states the recommendation is already implemented, detailing its ongoing research and development programme for hydrogen heating. This programme includes safety evidence, technical assessments, trial evidence, and energy systems modelling to inform a strategic decision in 2026.
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HM Treasury